GeorgeM777
Expert Alumni

Investors & landlords

You might consider reporting the ISO transaction that is producing the error as a regular stock trade.  Given that your strike price was greater than the FMV on the date of exercise, and if your sale was a disqualified disposition, then you don't have to report any part of gain as ordinary income.  If your sale was a qualified disposition, you report your gain as a capital gain as no part of that gain needs to be reported as ordinary income.  In either scenario, it seems you are just reporting the gain as a capital gain.  Thus, reporting the sale as a regular stock trade should eliminate the error.  In other words, report your basis (strike price) and your sale proceeds, along with your holding period.

 

@davidadempsey 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"